If your car is worth less than a certain amount, it’s usually suggested to only have the bare minimum of liability insurance required by the state your vehicle is registered in. This is often the conventional wisdom because having collision or comprehensive coverage on a vehicle that’s not worth much is considered throwing away money. Basically, the common thinking is that if you can afford to replace your vehicle on your own, then liability is all you need.

However, this is not necessarily true. It’s actually a myth that it’s enough to cover any damage done to others’ property. In fact, accidents usually cost far more than the minimum required by law. Likely, you’ll end up paying far more on out of pocket costs than you might anticipate.

Also, if you’re injured in an accident, even if you aren’t found at fault, the other party may not have enough if even any personal injury coverage. Even if you have good health insurance coverage, a serious injury could put you in a big financial hole. Paying for additional personal injury and collision coverage, then, can actually save you a ton of money in the long run. After all, that’s what the coverage is there for.

Your car is worth more than you think

Even if your car isn’t worth a high dollar value in the eyes of the auto market, think about the actual costs of replacing a vehicle. The time of actually finding a suitable vehicle, having to get it registered and insured, and paid for is its own cost. Plus, if you only have liability insurance, there are types of damage outside of accidents that won’t be covered and require you to replace your vehicle anyway.

There’s a prevalent myth out there that even just liability insurance will cover you in situations beyond accidents. But, unless you purchase comprehensive insurance coverage, your vehicle won’t be covered by any of the following types of damage:

Theft

Vandalism

Fallen tree limbs

Flood

Fire

Hail

If you’re willing to risk the total loss of your vehicle to any of these things, then it might be worth purchasing only the minimum coverage. But you still have to consider the above advice about potentially serious accidents, as well.

When can you save on insurance without sacrificing coverage you really need?

Many car loan agreements already require you to purchase certain levels of collision and comprehensive coverage in order to secure the funds. Of course, if you’re securing a car loan, the vehicle you are seeking to purchase is probably well worth the additional coverage in order to protect it from all types of damage.